The first is that the cold weather has forced increased consumption of gas and propane to heat homes. Because consumers are going to be “hammered” by high heating bills it means there will be less disposable income.

Another drag on the economy will be the cost to local government to deal with the unusual amount of winter weather this season. He said governments will have to cope with unexpected overtime, wear and tear on equipment and expenditures on materials such as salt.

“I suspect most local governments didn’t budget enough for this winter,” Basu said.

Basu also believes real estate may be impacted by the cold winter as well. He expected the most active buyers to be homeowners looking to upgrade their current home. But high energy prices–as well as many owners paying low interest rates on current mortgages–may make some potential buyers reconsider purchasing a bigger home.

“Gas and electric prices are positioned to impact larger homes with longer commutes,” he said.